The CSR Newsletters are a freely-available resource generated as a dynamic complement to the textbook, Strategic Corporate Social Responsibility: Sustainable Value Creation.

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Thursday, December 1, 2016

Strategic CSR - Canada

The article in the url below reveals a dramatic shift in government policy towards climate change that is happening just north of the border (for those of you living in the U.S.):
 
"By 2030, Canada intends to see its greenhouse gas emissions fall 30% from the 2005 levels of 749 megatonnes. To get there, the country expects its businesses to play an important role in a new plan that will include a program to make companies pay for their carbon emissions. Under the new government, led by Prime Minister Justin Trudeau, Canada expects to unveil a carbon pricing program as early as this fall. 'We're going to make sure there is a strong price on carbon right across the country,' Trudeau said during a TV interview [over the summer]."
 
The government subsequently launched a carbon pricing plan this past October (for details, see here), an approach that stands in stark contrast to the previous government of Stephen Harper, under which Canada announced it would be unable to meet its commitments signed under the Kyoto Protocol of 1992 (which committed the country to only a 6% reduction of greenhouse gasses by 2012 compared to 1990 levels). But, this low starting point just indicates how far Canada has to go to catch-up. Even the 30% reduction commitment by 2030 is considered by the international community to be weak, given that it "falls far below those set by the European Union and the US":
 
"Around 40 countries and more than 20 cities, states and regions are putting in place or already have a price on carbon, which translates to 12% of global emissions and an annual value of $50bn, according to the World Bank. The European Union runs the world's largest cap-and-trade program, launched in 2005, which involves 31 countries and covers 45% of its greenhouse gas emissions. The US Congress attempted to create a carbon pricing program after Barack Obama became president but failed to gain enough support."
 
The article suggests one reason for the lack of more substantive progress – business resistance, which is expected to be strong. As such, the government's commitment in practice has yet to be fully tested:
 
"Carbon pricing can be an effective weapon against global warming. But it's also a concept that historically has drawn a lukewarm reception from businesses, which tend to fight its financial impact on them."
 
In other words, while the initiative is hopeful, the details of implementation are yet to be worked out. Perhaps more importantly, early signs are mixed. For example, a quote toward the end of the article sums the general attitude most societies have taken on this issue, to date:
 
"Carbon prices vary considerably around the world, from less than $1 per tonne of emissions in countries such as Mexico to $130 per tonne in Sweden, with 85% of countries pricing carbon at below $10. [Mark Thurber of Stanford] believes Canada will set the price at around $15 per tonne. 'It's been pretty well established that that's a level that drives some abatement activities but the economic impact is fairly minor,' he said. 'It's big enough to be meaningful but it's not going to cripple them in the slightest.'"
 
But isn't the whole point to do something meaningful? If the goal is always to ensure "the economic impact is fairly minor," nothing will ever change. I may have missed something, but I thought the whole point is to punish behavior that is damaging to the collective, while at the same time rewarding behavior (e.g., investment in alternative energies) that promotes a healthy and strong society.
 
Take care
David
 
 
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Dear corporate Canada: It's time to pay for your part in climate change
By Alison Moodie
July 28, 2016
The Guardian